Private-Sale Sites Grow in a Struggling Economy

The success of private-sale sites like Gilt Groupe, which holds daily members-only sales of off-season luxury items, have led to imitators hoping to emulate the success of a business model that’s catching on with recession-strapped consumers.

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Private-sale sites let shoppers experience the cachet of owning luxury items without paying full price. Their Web-only setting eliminates the public guilt of making big-ticket purchases in a down economy. And the short time in which items can be reserved in shopping carts means customers have to click fast, enhancing the allure for some.

One of the newest such sites is One Kings Lane, which focuses on furniture and other housewares. Like the Gilt model, it sells luxury goods from two or three brands a day at 50% to 70% off original prices. The items are usually discontinued or out-of-season, and shoppers have 15 minutes to buy items they add to their shopping carts before they go to the next buyer.

“This model has worked very well in Europe, which was something we were tracking,” said Susan Feldman, a co-founder of One Kings Lane. “It gives people, whether they have the resources or not, access to things they wouldn’t ordinarily have.”

Each vendor’s sale lasts three days, but One Kings Lane has seen products sell out with 45 minutes. “The papers are saying that [sales of] everything related to the home [are] down,” said another co-founder, Alison Gelb Pincus. “We’re not seeing that trend.”

When One Kings Lane launched in March, it was focusing on smaller items like candles and other accessories, but as the site attracted more than 100,000 members and began generating nearly $1 million in sales per month, it added larger furniture like chandeliers and sofas, as well as an e-gift-card program, which it says competitors don’t offer. Housewares tend to be less vulnerable to changing tastes than purses and shoes, another benefit for One Kings Lane, the company said.

“Consumers are winning because they’re getting a great value and a great product,” Ms. Feldman said. Manufacturers “didn’t have a lot of options except to go to the big-box stores,” she added. “This gives them an opportunity to move goods quickly and in a very discreet manner.”